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“Liberation Day” Plus One was not a happy day for anyone with dollars to sell, as USD sank by close to 2% against the euro and yen, and even more against the Swiss franc.
The dollar is at its lowest against the pound and euro since October, with USD/EUR having lost around 7% in two months.
Former New York mayor and Trump stalwart Rudi Giuliani rang the opening bell on the New York Stock Exchange yesterday, starting a day of the biggest losses on Wall Street since the pandemic struck five years ago.
However, Trump could point to some immediate positive effects, as UK digger manufacturer JCB announced plans to double the size of its new factory in Texas, investing $500million. JCB are unlikely to be the only manufacturer looking to escape tariffs in such a way.
But what of sterling? The UK getting away relatively lightly on tariffs was little help for the pound, which lost almost across the board. GBP/EUR lost well over 1%.
The euro’s strength was a result of capital outflows from the US to Europe. Almost all currencies are gaining against the dollar but the euro is gaining more than most. However, the markets may also be betting on the tariffs on Europe being watered down if it can cut its current $235bn trade surplus.
Tariffs were not the only game in town yesterday. The final result for March’s Purchasing Managers’ Index (PMI), a highly influential gauge of business optimism, found a surge in confidence from business leaders in UK services and manufacturing. This was echoed throughout most eurozone countries too.
This afternoon we will hear the latest on the US jobs market, with Non-Farm Payrolls, and a speech from US Federal Reserve Chair Jerome Powell, where he could outline the Fed’s response if tariffs cause US inflation to spike.
So there is plenty of potential life left in the currency markets today. Make sure any upcoming transactions are protected against the risks of sudden market movements. Secure a fixed exchange rate now with a forward contract; call your Business Account manager on 020 3918 7255 to get started.
GBP: Sterling down as tariff news sinks in
Sterling weakened almost every major currency except for the US dollar yesterday, most notably against the euro and yen. This morning we will be hearing the final result for construction PMI. Monday will kick off with the Halifax House Price Index, but the main event of the week will be GDP on Friday.
GBP/USD past year
EUR: Euro up as money flows in
The single currency was in bullish mood yesterday, strengthening against almost every currency, including 2% against the US dollar. There will be some insight on the currently parlous state of European construction shortly, with PMI data, and Monday starts with Germany’s Balance of Trade.
EUR/USD past year
USD: Dollar waits on Non-Farm Payrolls
The dollar index dropped by more than 1.5% yesterday to a six-month low. However, today is another day and coming up this afternoon we’ll have Non-Farm Payrolls. The markets won’t be too bothered by DOGE layoffs, but a general tightening of the jobs market will be a warning, as it is seen as a bellwether of America’s immediate economic future.
USD/GBP past year
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